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Palo Alto Networks (PANW) Increases Yet Falls Behind Market: What Investors Need to Know

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Palo Alto Networks (PANW - Free Report) closed at $333.16 in the latest trading session, marking a +0.69% move from the prior day. The stock's change was less than the S&P 500's daily gain of 1.08%. Elsewhere, the Dow saw an upswing of 0.32%, while the tech-heavy Nasdaq appreciated by 1.58%.

Shares of the security software maker witnessed a gain of 3.3% over the previous month, beating the performance of the Computer and Technology sector with its loss of 4.77% and the S&P 500's gain of 0.43%.

Analysts and investors alike will be keeping a close eye on the performance of Palo Alto Networks in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.41, marking a 2.08% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.16 billion, up 10.64% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.57 per share and a revenue of $8 billion, signifying shifts of +25.45% and +16.05%, respectively, from the last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Palo Alto Networks. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.03% upward. Palo Alto Networks is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Palo Alto Networks is presently being traded at a Forward P/E ratio of 59.42. This indicates a premium in contrast to its industry's Forward P/E of 29.66.

Investors should also note that PANW has a PEG ratio of 2.67 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry had an average PEG ratio of 1.77 as trading concluded yesterday.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 82, which puts it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PANW in the coming trading sessions, be sure to utilize Zacks.com.


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